- Life insurance is the most important insurance of them all.
- About 20 years ago, little old Trumpo was an insurance salesman and always believed that life insurance should be the No 1 priority when planning your finances.
- Mon 8th Mar 2010
- Stamp duty return hits first time buyers for six.
- In what can only be described as a dramatic drop in new mortgage lending last month, it appears to be the return of stamp duty that has put the boot in.
- Mon 1st Mar 2010
- Northern Rocks bad bank is not that bad after all.
- Trumpo learns that people are able to move their Northern Rock mortgages to new properties.
- Thu 18th Feb 2010
Mortgage rates
- Trumpo mortgage advice is free and is provided by FSA regulated financial advisers
- Our trusted advisers will help you find the lowest mortgage rates
Fixed rates
Most lenders provide fixed rates to allow customers to pay a set amount over a specific period normally between 2 and 5 years. It is however possible to fix the mortgage for up to 25 years.
Positives:
- Guaranteed mortgage payments for the period requested allowing you to budget your monthly payments.
- Peace of mind knowing that if interest rates go up your payments remain the same.
Negatives:
- Usually the payment rates are not the lowest available.
- The best fixed rates normally have higher than normal arrangement and administration fees.
- If rates drop you will still be paying the higher fixed rate.
- If you want to get out of the fixed rate you will normally have to pay a hefty redemption penalty, normally a percentage of the total amount borrowed or several months interest payments.
Variable rates
The variable rate mortgage is set by your particular mortgage lender and payments will change when the bank of England change the Bank Base rate. If the Bank Base rate goes up then your payment will go up, if the rate goes down then your payment goes down. This is the most straight forward and basic type of mortgage and normally only comes into effect when people come out of a fixed rate have an old mortgage that has been running for a long time. It really is a product with no bells and whistles.
When people come out of a fixed rate or one that changes when the lender announces interest rate changes. So unlike a fixed rate, if the mortgage rate goes up then you will be paying more each month. Equally, if it goes down then you pay less.
Positives:
- No fees for this type of mortgage.
- Your rates will fall with the Bank of England Base Rate.
- No redemption penalties.
Negatives:
- Payments go up with the Bank of England Base Rate.
- Inability to budget your monthly outgoings.
- If you want to move out of the mortgage product during the capped period you will normally have to pay a redemption penalty of a percentage of the loan or a number of months interest payments.
Discounted rates
A lender will offer a discounted rate for a specific period of time. This rate will normally remain at a specific percentage below the variable rate for the specific period only i.e. if the lenders variable interest rate is 6% when you complete on the mortgage and you have been offered a 2% discount for 2 years then you will pay 4% for the two year period if the interest rates don't change. If they go up by 1% you will pay 5% if the go down 1% you will pay 3%.
Positives:
- Provides cheaper monthly payments than the variable rate.
- If Bank of England Rates Fall your payments are likely to fall.
Negatives:
- Payments will rise if the Bank of England interest rates go up.
- A Discounted rate mortgage will normally incur application or reservation fees.
- If you want to move mortgage during the discounted period then you will normally have to pay a redemption penalty of several months interest or a percentage of the total loan.
